High Water, Low Interest

On the night of June 25, hundreds of residents of Arlington Terrace and Fenwick Drive abandoned their homes to the water that was swirling up the walls of their basements and lapping at the doors. They clung to their children and their pets as they waded through a hip-deep current in lashing rain to high ground, where they waited hours before being taken to an emergency shelter at Edison High School.

It has been two months since that long night’s wait for shelter. Flood evacuees have been pumping, scrubbing and hammering their homes back into livability. But they’ve been using one tool more than any other: their credit cards. Many homeowners were forced to use plastic to put down payments on cars so they could return to work, to pay electricians to install new electrical boxes, plumbers to install water heaters, contractors to replace studs and drywall.

Most residents estimate it will cost tens of thousands of dollars to repair their homes and replace their ruined property. In the small duplex houses that are typical in the neighborhood, floor space is at a premium and many of the basements were fully furnished. Most residents did not have flood insurance, and for those who did, their personal possessions often weren’t covered. They waited in suspense for one month as FEMA deliberated on whether to provide individual disaster assistance. But FEMA’s announcement gave no relief, assistance denied.

However last week the Small Business Administration announced that although Huntington residents would not be receiving any grants from the government, many would at least be able to transfer their high interest credit card debts to a long-term loan with a low interest rate.

The Small Business Administration will provide disaster loans to flood-affected residents of Fairfax County, Alexandria and all bordering localities, including Arlington, Loudon, Prince William, Fairfax City and Falls Church. The SBA offers various loans to cover damage to private homes and the loss of possessions, measures to protect homes in the future, and damage to non-profits’ and small business’ infrastructure and operations. The loan for homeowners without the resources to borrow elsewhere features a 2.937 percent interest rate. It has a $200,000 limit for home repair and $40,000 limit for replacement of possessions.

THE SBA has opened an office in the South County Government Center located at 8350 Richmond Highway. It will be open 10 a.m. to 7 p.m. Monday through Friday and 9 a.m. to 4 p.m. Saturday. SBA loan officers will be available to help people complete their applications. Marc LaFountain, a spokesman for the Virginia Department of Emergency Management, said there were “several hundred” households in the area that would be eligible to apply for the loan, though no one was guaranteed to receive it. He said the South County office would remain open as long as people needed to keep using it.

LaFountain advised potential applicants to come together with all income earners in the household and to bring their insurance and financial information with them in order to speed the application process.

“There is no benefit in waiting,” LaFountain said. “If you think you might need this money you should come in and apply.” He said that processing of the application can take between 10 days and three weeks, because an SBA assessor must visit the home. If approved, it will be another two weeks before any money arrives. He added that people can apply for the loan without committing to accepting it. “Just because you apply and you’re approved doesn’t mean you have to take the loan,” he explained.

STACY HOEFLICH and April Rodgers are Alexandria public school teachers who live together on Fenwick Drive. They came to the SBA office almost as soon as it opened on Monday morning to apply for a disaster loan. Although they had flood insurance that would pay for the damage to their house caused by the water that rose to their first floor, they had yet to receive an insurance payment. “We had a little bit of trouble with our insurance adjuster not being timely,” Hoeflich explained.

But even when they get the money, it will leave some major expenses unmet. “Federal flood insurance has a lot of things it won’t cover,” said Hoeflich.

She and Rodgers hope the SBA loan will help fill gaps in coverage that does not cover the television, computer and everything else installed in the “hang-out” room they’d completed only weeks before the flood. “It looks like [the loan] picks up the pieces that aren’t getting picked up,” Rodgers said.

Now that they have finished their application, Hoeflich and Rodgers are waiting for an assessor to come and a decision to be made on the specifics of the loan they will receive. SBA loans will only cover expenses that have not been covered by insurance.